84) Payment for merchandise sold on credit for $100 subject to 2/10 n/30 was rec
ID: 2343979 • Letter: 8
Question
84) Payment for merchandise sold on credit for $100 subject to 2/10 n/30 wasreceived within the discount period - $98 was received. This was recorded
with a debit to Sales Discounts for $2, a debit to Cash for $98, and a credit
to Accounts Receivable100, but no mention was made of the subsidiary ledger
account. This error will cause:
A) the net income for the period to be overstated.
B) the net income for the period to be understated.
C) the assets to be overstated.
D) the control account to not agree with the subsidiary ledger.
85) When the term F.O.B. shipping point is used, title passes:
A) when the buyer unpacks the goods.
B) when goods are shipped.
C) when goods reach the halfway point.
D) when goods reach the destination.
86) A form used to request the purchase department to buy goods is a:
A) sales invoice.
B) purchase requisition.
C) purchase invoice.
D) receiving report.
87) A form completed at the time the shipment arrives is the:
A) receiving report.
B) purchase order.
C) sales invoice.
D) purchase invoice.
88) A list of creditors with ending balances is called:
A) a trade list.
B) a schedule of accounts payable.
C) a list of suppliers.
D) a schedule of accounts receivable.
89) Magic Shoe offers a trade discount of 25%. If the list price is $1,200, the
trade discount amount would be:
A) $300.
B) $400.
C) $900.
D) $200
Explanation / Answer
84) Payment for merchandise sold on credit for $100 subject to 2/10 n/30 was received within the discount period - $98 was received. This was recorded with a debit to Sales Discounts for $2, a debit to Cash for $98, and a credit to Accounts Receivable100, but no mention was made of the subsidiary ledger account. This error will cause: D) the control account to not agree with the subsidiary ledger. 85) When the term F.O.B. shipping point is used, title passes: B) when goods are shipped. 86) A form used to request the purchase department to buy goods is a: B) purchase requisition. 87) A form completed at the time the shipment arrives is the: A) receiving report. 88) A list of creditors with ending balances is called: B) a schedule of accounts payable. 89) Magic Shoe offers a trade discount of 25%. If the list price is $1,200, the trade discount amount would be: A) $300.
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